Your Right to Know

Enlarge ImageRequest to buy this photoWayne Parry | ASSOCIATED PRESSBeachgoers pass rubble from superstorm Sandy-damaged houses in Point Pleasant Beach, N.J. Property owners in New Jersey and New York are getting good news.

MANTOLOKING, N.J. — With all the fears that superstorm Sandy created, here’s one that never
materialized: huge tax increases to make up for property destroyed along the coastlines of New
Jersey, New York and Connecticut.

Waves of federal aid, some strategic borrowing, lowered property values and surplus accounts
helped many shore communities avoid having to raise taxes drastically to compensate for the lost
revenue.

But the sighs of relief are mixed with early jitters of what could happen next year, when the
tide of emergency storm aid will have receded and some neighborhoods will still need full
rebuilding.

The thinking was that because shore towns had lost so much taxable property in the Oct. 29
storm, governments would have no choice but to raise taxes on surviving structures to make up the
difference. But that was before Congress approved more than $60 billion in Sandy relief, most of it
for New Jersey and New York.

“We were all concerned there would be a big tax increase,” said Ray Ryan, a resident of
Mantoloking, a Jersey shore town where virtually every one of its 521 homes was destroyed or
damaged. “But we are delighted it didn’t. It makes absolutely wonderful sense when you consider the
storm aid that was available.”

The affluent borough adopted a 14.6 percent increase in the municipal tax rate. But because the
storm lowered property values and because of an influx of storm recovery aid and borrowing, most
municipal tax bills actually will be lower this year.

“That’s the good news: Taxes in 2013 will be lower,” said Councilman Steve Gillingham. “But
because these are nonrecurring revenues, it may be hard in subsequent years to provide the same
level of services.”

The budget calls for $5.6 million in spending, up from a little more than $4 million last year.
But the average tax bill will be 23 percent less than last year because storm damage caused
property values to plunge by about a third.

For example, the owner of a house previously assessed at $1 million and now worth $670,000
because of storm damage will pay $1,398 in municipal taxes, down from $1,817 a year ago. The owners
of a $3 million home now worth about $2 million would pay $4,186 in municipal taxes, down from
$5,450 last year.

Those figures do not include school or county taxes and are the only ones over which
municipalities have direct control. Homeowners in many towns still might see an overall increase in
taxes because of school spending or other causes, but the doomsday scenario that many municipal
officials — and homeowners — had feared is not happening.

Lance White, a Mantoloking resident who is razing his damaged waterfront house, was relieved to
hear that taxes will not skyrocket this year.

“It would have been a disaster,” he said. “We have a lot of people who still don’t know what
their future is — whether they can rebuild, when, whether they might have to leave. There is still
a lot of uncertainty.”

In community after community, municipal taxes are either staying the same this year or going up
only slightly. Money towns had to front out-of-pocket in the fall and winter for emergency cleanup,
and as much as 90 percent of reconstruction costs will eventually be paid back by the federal
government.

New York state passed legislation to aid badly affected homeowners, authorizing New York City to
reimburse them by up to two-thirds of the total bill paid for the 2013 fiscal year. In May, the
city announced a decrease in property taxes due next year through reassessments of damaged
properties and across-the-board reductions in valuations for some of the hardest-hit
neighborhoods.